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One big handicap to road construction is the diversion of motor-vehicle revenue into nonhighway purposes, such as public welfare and mental hospitals. Last year the New Jersey legislature tacked a 1¢ increase on to the 3¢ state gasoline tax, earmarked it for state aid to local schools. Thus, out of $100 million in motor vehicle revenue collected in New Jersey this year, the State Highway Department got only $15 million to spend on highway construction. Half the states have constitutional amendments to block such diversions, and some want to go further: they have asked the Federal Government to give up its 2¢-a-gallon tax on gasoline and diesel fuel so that the states can collect it. But if the federal gas tax were abolished, many a state legislature would hesitate to reimpose it. Thus, the highway funds the Federal Government now collects and gives back to the states ($875 million this year) would be lost. Moreover, the U.S. Bureau of Public Roads believes that only by enforcing minimum federal standards will the nation have the well-knit interstate system it needs. Every tourist who has crossed a state line knows the experience of going from a broad, well-paved highway onto a narrow, crumbling strip of tar and gravel.
To try to solve the nation's highway problem, President Eisenhower this week formally presented to Congress his program to build $101 billion worth of roads over the next ten years. He wants to do this by raising federal grants from about $9 billion to $30 billion, persuading state and local authorities to revise their spending from about $38 billion to $71 billion. To finance the Federal Government's additional share, President Eisenhower's highway committee wants to set up a Federal Highways Corp. that would float some $20 billion in bonds, sell them to private investors around the U.S. It estimates that these bonds could easily be paid off over 30 years from the 2¢ gasoline tax.
Some Democrats complain that an autonomous highway corporation would pave the way for other autonomous agencies to build hospitals, schools, etc. But many a businessman wonders: Why not? When a merchant or manufacturer needs to modernize and grow, he does not hesitate to borrow if he knows he can pay off the loan out of his future profits. In the same way, allowing private investors to put up the necessary cash to build roads would get roads built without either federal or state governments going further into debt.